Article in NYT concerning the evolution at Fannie Mae. The pressure to take more risky loans came during the heyday of the Republican Congress. But it wasn’t just Congress, as Gov. Palin said during the debate on Oct 2. Wall Street, investors and the White House pressured Fannie Mae to underwrite the subprime mortgages being written by Countrywide and others.

Seems Fannie Mae had connections to GS:

But earlier this year, Treasury Secretary Henry M. Paulson Jr. grew concerned about Fannie’s and Freddie’s stability. He sent a deputy, Robert K. Steel, a former colleague from his time at Goldman Sachs, to speak with Mr. Mudd and his counterpart at Freddie.

Mr. Steel’s orders, according to several people, were to get commitments from the companies to raise more money as a cushion against all the new loans. But when he met with the firms, Mr. Steel made few demands and seemed unfamiliar with Fannie’s and Freddie’s operations, according to someone who attended the discussions.